ASEAN-5 Capital Flow Trends (2016-2024)

(Note) This graph is one of several charts I created based on data I researched while drafting an op-ed for Nikkei Asia on June 25th.

Executive Summary:

Overall, the ASEAN-5 faces increasing pressure from declining portfolio investments. While FDI remains a stable source of external financing, heightened volatility in other balance of payment components points to potential challenges for capital flows, funding costs, and exchange rate stability in the region.

Key Points:

• Net FDI (grey line) has stayed relatively stable at a high level over the years.

• Portfolio Investment (yellow line) has dropped sharply since 2018, turning negative in recent years.

• Current Account (blue line) and Capital and Financial Account (orange line) show significant fluctuations, reflecting external balance volatility.

• The divergence between stable FDI and volatile portfolio flows indicates changing investor sentiment and risk perceptions.

• Declining portfolio inflows suggest tighter regional capital market conditions.